Will appliance rebate program be a clunker?

Tuesday

Sep 29, 2009 at 12:01 AM

Jeff Martin said he appreciates the government trying to stimulate the appliance industry, but the co-owner of Martin Appliance Centers fears the Cash for Refrigerators program may leave customers disappointed and not be worth the trouble for stores.

By Anthony ClarkBusiness editor

Jeff Martin said he appreciates the government trying to stimulate the appliance industry, but the co-owner of Martin Appliance Centers fears the Cash for Refrigerators program may leave customers disappointed and not be worth the trouble for stores.The U.S. Department of Energy allotted $300 million in federal stimulus funds to offer rebates for consumers to buy energy-efficient home appliances.Each state has until Oct. 15 to submit plans for the program. The Florida Energy & Climate Commission votes today in Tampa on a draft of how to administer the $17.6 million allocated to the state.As it stands, consumers are eligible for rebates on purchases of Energy Star rated gas tankless water heaters, room air conditioners, washers, refrigerators, dishwashers and freezers purchased from April 16 to April 25, 2010, timed to coincide with Earth Day.The commission will choose from three rebate options - a flat 20 percent off all purchases; a tiered system that starts with a $50 rebate for purchases up to $500, up to a $300 rebate for purchases of more than $1,000; or a rebate based on appliance type, ranging from $50 for an air conditioner to $300 for refrigerators and water heaters.An additional $75 will be awarded to consumers who offer proof of recycling the appliance that was replaced.What troubles Martin is that after spending enough to ramp up for a short rush and scrambling to get deliveries out, there is no guarantee customers will receive the rebates before the funding runs out.Unlike Clunkers, it is the customer, not the dealer, who submits the paperwork and applies by certified mail.Comparisons to the Cash for Clunkers car stimulus program may also lead to confusion, he said. People with an old car worth $1,000 could receive $4,500 to buy an economy car, which tends to be less expensive, while Energy Star appliances tend to be the more expensive models."Not everybody plans to buy a $1,000 washing machine or has the ability to do that," Martin said.

Sheri Banner, 51, took delivery of an Energy Star-rated Samsung refrigerator from Martin Appliance on Monday at her recently purchased Micanopy home.She said she was more motivated by concern for the environment than any energy cost savings she might see."We're trying to do that with anything we buy - windows, air conditioners," she said. "We're trying to be as green as we can."Martin said a lack of information about the program has already hurt business as customers saw or heard through media outlets about an appliance rebate when Clunkers ended.For a couple of weeks, sales "took a nose dive" as people delayed appliance purchases. But he said business has picked back up again at Martin Appliance's Gainesville and Jacksonville stores.Allen Crabtree, general manager of Sears at The Oaks Mall, said with the aggressive sales offered in the market, there's no reason to delay a purchase.Sears is advertising 20 percent off top brands this week and 25 percent on Sunday.Appliance retailer hhgregg is advertising its own Cash for Clunkers promotion with $30 to $300 off Energy Star appliances this week, and Best Buy is offering 10-20 percent off purchases of two or more appliances and $200 each off a Whirlpool washer and dryer.Martin Appliance has 20 percent off GE washer and dryer sets, which a salesman who asked not to be identified said could be better than the rebate since dryers aren't Energy Star rated.Like much of the stimulus bill, the appliance rebate is designed to create jobs, save energy and reduce greenhouse gases.

According to the Energy Star program, the more efficient appliances can save $75 a year in energy costs and use 10 percent to 50 percent less energy and water than traditional appliances.The Martin salesman said many of their Gainesville customers are choosing more expensive Energy Star appliances to save more money in the long term.The appliance industry that relies in part on home sales could use a shot in the arm.Shipments of home appliances were down 9 percent in 2008 from 2007 and 15 percent from 2006, according to the Association of Home Appliance Manufacturers.The downturn is more dramatic in Florida, which saw taxable sales of household appliances and accessories down 54 percent for the first six months of 2009 from the same period in 2006, according to the Florida Department of Revenue.Alachua County taxable sales have actually been climbing for the six-month period in 2008 and 2009 after a drop in 2007.Crabtree said he's not surprised by the local tax figures because of the relatively stable employment base."It's not hung wholly on new construction like it is in some counties," he said.Appliances will always sell as long as old models break down, he said. He's seeing more purchases for home remodeling projects, including a big sale recently to someone who couldn't sell their home.Crabtree said the appliance business overall started off poorly the first part of the year, but is trending up in the last 90 days.

Gainesville appliance dealers will have less competition with the recent closing of Appliance Direct in the old Rex electronics store on Northwest 13th Street and 23rd Avenue.Appliance Direct has backed out of deals to lease 21 former Rex properties and closed all of its Alabama stores, according to a Securities and Exchange Commission filing and media reports.The Melbourne-based company's president did not return calls.